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Taxes Were Cut, But Revenues Went Up2 min read

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Human Events recently had a nice short article showing how, after the Bush tax cuts of 2003, tax revenues went up.  This is classic supply-side economics at work, and the graph at right is self-explanatory if you realize the 2003 date.

Even better, George Gilder of the National Review explains how this works, in Evolution and Me: Darwinian Theory has Become an All-Purpose Obstacle to Thought Rather than an Enabler of Scientific Advance.

From the upcoming Gilder article:

. . . Turning to economics in researching my 1981 book Wealth & Poverty, I incurred new disappointments in Darwin and materialism. Forget God – economic science largely denies intelligent design or creation even by human beings. Depicting the entrepreneur as a mere opportunity scout, arbitrageur, or assembler of available chemical elements, economic theory left no room for the invention of radically new goods and services, and little room for economic expansion except by material ‘capital accumulation’ or population growth. Accepted widely were Darwinian visions of capitalism as a dog-eat-dog zero-sum struggle impelled by greed, where the winners consume the losers and the best that can be expected for the poor is some trickle down of crumbs from the jaws (or tax tables) of the rich.

In my view, the zero-sum caricature applied much more accurately to socialism, which stifles the creation of new wealth and thus fosters a dog-eat-dog struggle over existing material resources. (For examples, look anywhere in the socialist Third World.) I preferred Michael Novak’s vision of capitalism as the ‘mind-centered system,’ with the word itself derived from the Latin caput, meaning head. Expressing the infinite realm of ideas and information, it is a domain of abundance rather than of scarcity. Flouting zero-sum ideas, supply-side economics sprang from this insight.

By tapping the abundance of human creativity, lower tax rates can yield more revenues than higher rates do and low-tax countries can raise their government spending faster than the high-tax countries do. Thus free nations can afford to win wars without first seizing resources from others. Ultimately capitalism can transcend war by creating rather than capturing wealth – a concept entirely alien to the Darwinian model. . . .

This just re-emphasizes another reason why I doubt evolutionnaturalistic evolution fails philosophically, in that it can not be integrated with the foundations of logic.